Football to finance: Sir Alex Ferguson's investing successes
Born in 1941 in Glasgow, Sir Alex Ferguson was the leading man at Manchester United for approaching three decades.
Starting his tenure in 1986 and retiring in May 2013, over the course of his entire managerial career (which in total lasted 39 years), he won an astounding 49 major trophies, making him the most successful manager in the history of British football.
Although known for his time at Manchester United, it was when he was at Aberdeen that he first gained national attention, seeing the team come out top over Real Madrid in the European Cup-Winners Cup final in 1983
Admired for placing his emphasis on attacking football, with homegrown talent at the heart of his teams, he bowed out as league champion at Manchester United following his 1,500th game in charge.
Appointed as a Fellow to the Executive Education Programme at Harvard Business School shortly before leaving United, since then he has taken up the positions of both Director and Global Ambassador with Manchester United, and was also appointed Coaching Ambassador by UEFA.
Scoring with an investment career
Perhaps understandably, Sir Alex has amassed an enviable fortune over the years, and at the point of leaving United he was thought to be worth as much as £30 million.
Whilst this figure owes a lot to his managerial career, it has undoubtedly been bolstered by his investment career.
In July 2003 Sir Alex helped launch Active Asset Investment Management (AAIM), which created tax-efficient syndicates for high-net-worth individuals who wanted to invest into property.
Alongside former Manchester United player Alan Smith, ex-Manchester City player Gareth Barry and a number of other investors, Sir Alex contributed a total of £50m equity into the company.
A keen speaker, one of Sir Alex's most notable talks took place during the middle of his Manchester United career, when he gave a lecture to Manchester's emerging cluster of biotechnology and health entrepreneurs.
Providing an insight for startups and healthcare companies into managing and motivating brilliant members of staff on considerable salaries, a piece in the Guardian puts the link between football management and investing perfectly, saying "keeping fabulously wealthy young men hungry for success was a formula applicable in the venture capital-fuelled world of biotech".
During the lecture, Sir Alex gave an insight into his own career. Having no formal management training and no real transition period after the end of his playing career, he attributed his success to four factors - all of which can be extremely useful as traits of a successful investor:
- High ambition
- Ability to take difficult decisions
- Instilling and maintaining team discipline
Fastforward to more recent times and in 2015, a documentary on Sir Alex was released and was headlined as being ‘entertaining, insightful and, perhaps surprisingly, highly relevant for all investors’.
A fitting phrase, the reason behind this is the former Manchester United manager was able to exert a level of control at the club that's rare in modern day football - he was in charge of almost every decision made regarding recruitment, tactics, logistics and everything in between.
Apparently, he even decided the suits the players wore when travelling to and from games!
This undoubtedly has a parallel with investing, since the most successful investors are usually those who can exert the most control.
Importantly, that’s not control over the companies they invest in, the market, other investors or in future events - it’s control over themselves and, more specifically, their investing emotions.
In the same year, Sir Alex authored, "Leading" co-written with Sequoia Capital's chairman, Sir Michael Moritz, a venture capitalist renowned throughout Silicon Valley for his early investments in Google, LinkedIn and Yahoo.
Investing into leading prepaid card provider Pockit last year, which had raised £1m following the completion of its first round of funding, earlier this year, as a keen wine connoisseur, Sir Alex announced a line-up of liquid investments with a level of quality to match even his best Man United side.
Announcing an auction of part of his collection that is expected to return in the region of £3 million, what's more, his company made £6 million in profit last year - and when you consider his most recent accounts show he is holding £15.2 million in assets, of which £13 million was in investments and another £676,000 in property, you can begin to see the focus Sir Alex has for investing.
Proving investing doesn't require considerable wealth
Although celebrities are often renowned for investing large amounts of capital, Sir Alex has shown his strategic approach to investing into business.
In 2012, he invested £100 into Accrington Stanley, who welcomed Sir Alex Ferguson as the 500th investor after the Manchester United manager bought a single share.
Sir Alex clearly saw this as an opportunity to promote the clubs' shares, as well as sending out a clear message to all potential investors that amounts of even £100 are perfectly acceptable, especially as part of a co-investment model, to drive a community of investors to a particular deal.
Taking an investing lead from celebrities
As we mentioned in our 'The Fame And Fortunes Of The Celebrity Investor' post, many celebrities find themselves automatically being a role model.
What's more, UK celebrities like everyone else in the country can potentially see huge benefits from the generous tax reliefs of schemes such as SEIS and EIS.
And these tax reliefs really are fantastic for both investors and entrepreneurs alike.
For investors, you could benefit from income tax relief of up to 50% with SEIS investments - and in the 25 years EIS has been available, almost £16 billion has been raised through EIS-qualifying investments, enabling a high level of growth and success for the best British SMEs.
Ambitious entrepreneurs - celebrities and non-celebrities alike - are pioneering UK British business initiatives, driving businesses by investing not only finance but also time and advice (something that's arguably invaluable) to help build and drive forward those high growth businesses.